Nebraska Attorney General Michael T. Hilgers has filed a lawsuit against the Omaha Public Power District (OPPD), claiming the utility is violating state law by prioritizing environmental goals over its duty to provide affordable and reliable electricity. The lawsuit, filed in Douglas County District Court, focuses on OPPD’s plan to shut down coal operations at its North Omaha Station and transition to a net-zero carbon emissions strategy. The Attorney General argues that this shift places environmental and social priorities ahead of consumer protection and contradicts the legal purpose of Nebraska’s public power system.

The dispute centers on how Nebraska’s public utilities balance climate initiatives with their statutory obligations. Nebraska is the only state in the country where electricity is provided entirely by publicly owned utilities, a system created in the 1930s to ensure residents had access to dependable, low-cost power. Under state law, public power districts are required to keep affordability and reliability as their foremost objectives.

According to the Attorney General, OPPD’s plan to retire three coal-fired units and convert two others to natural gas by 2026 violates that policy. The lawsuit describes these actions as part of the utility’s “Power with Purpose” and “Pathways to Decarbonization” programs, which aim to reduce carbon emissions and promote environmental justice. The state contends that while these initiatives may serve environmental objectives, they do not align with the state’s requirement that public utilities focus first on keeping power costs low and ensuring reliable service.

The complaint argues that OPPD has exceeded its authority and acted against public policy by adopting measures that elevate environmental priorities over its core mission. The Attorney General’s office also points to OPPD’s internal data showing that delaying the plant’s closure could save significant costs and improve grid stability. According to the filing, keeping the North Omaha Station in operation for another 15 years could save approximately $439 million and help meet growing energy demand. OPPD officials have acknowledged that maintaining coal capacity would strengthen reliability, but have continued to move forward with retirement plans for environmental reasons.

The lawsuit comes as electricity demand in Nebraska and across the United States continues to rise. New data centers, manufacturing projects, and the wider use of electric vehicles and heating systems have increased pressure on the power grid. The Attorney General argues that reducing coal-based generation while demand is growing could lead to higher prices and a greater risk of power shortages. The complaint references past reliability problems in California and Europe as examples of what can happen when traditional energy sources are phased out before renewable replacements are fully ready.

In addition to alleging violations of state law, the Attorney General accuses OPPD’s leadership of exceeding their legal authority and breaching fiduciary duties owed to ratepayers. The lawsuit names OPPD President and CEO Javier Fernandez and six members of the Board of Directors as defendants in their official roles. It seeks a court order to stop OPPD from reducing coal-based generation or implementing any policy that places environmental goals ahead of affordability and reliability.

Hilgers’ office describes the case as a defense of Nebraska’s public power system, which has historically provided residents with some of the lowest electricity rates in the nation. The complaint argues that OPPD’s current direction threatens that record and could influence how other public utilities interpret their responsibilities under state law.

OPPD has not yet filed a response to the lawsuit.